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Episode #556: Current Trends in PPOs You Need To Know, with Sandi Hudson

Insurance is all so confusing — and it’s not the dentist’s fault! To provide guidance and help you figure out the PPO landscape, Kirk Behrendt brings in Sandi Hudson, founder of Unlock the PPO, to demystify PPO trends and explain what you need to know about insurance participation. More practices than ever are dropping their plans. Maybe it’s time for you! To do it with the help of an expert, listen to Episode 556 of The Best Practices Show!

Episode Resources:

Main Takeaways:

Always do your homework. Don’t start randomly dropping insurances.

Understand direct contract versus shared network agreements.

Know the difference between an opt-out and a termination.

Make a habit of auditing your EOBs regularly.

Don’t try to figure this out on your own!


“Whatever you signed ten years ago is no longer what you’re getting. It’s a completely different thing that you’re getting with all of your participation than what you originally agreed to. So, you need to be the one to take control of that instead of letting the insurance companies make those decisions for you.” (5:25—5:44)

“Until recently, I’d say the last couple years, most offices complained about their PPO fees, but they didn’t necessarily make drastic changes with them. Even if it was a crappy fee schedule, it seemed hard for them to completely let go of them, a lot of times. And now, I’m seeing far more offices dropping plans. My partner, Lisa, on the startup side, is seeing startups become a lot more selective about what they take to start with. So, it used to be that even if you didn’t take very many PPOs, you always took Delta. That was kind of the given. Lots of her startups are not even taking Delta now to open a brand-new practice. So, we’re starting to see new practices be more selective.” (6:12—6:59)

“After COVID-19, we saw things start rebounding in terms of your patients coming back, offices getting busier. But now, all of a sudden, they’re dealing with higher supplies. Everything has gone up in price. Even more so, the staffing issue right now is huge. If you can find staff at all, if you have good staff, you’re having to pay more to keep them. If you’re trying to find new staff, that’s impossible in a lot of areas, particularly with hygienists. We had so many hygienists exit the industry with COVID-19 and choose not to come back at all. There’s a real shortage, so it can be months, sometimes, to find a hygienist to work. So, you’ve got that whole side. Expenses are going up. And then, now, on the flip side, you’ve got PPO fees that are staying very stagnant. So, most of the doctors I talk with are really in a place where they’re like, ‘Now is the time. If I’m going to be changing my insurance contracting, whether I like it or not, there’s not a choice anymore. I’m not able to pay more to a hygienist than I’m getting from the insurance company for a prophy.” (7:10—8:22)

“A lot of dentists are telling me they’re supplementing. They’re lowering their income in order to offset higher staff expenses that they need to pay for just to keep things going. So, that’s a tough deal. At some point, something’s got to give with that. And so, I’m seeing a lot more offices saying, at least these bottom ones, ‘We’ve got to start somewhere. Let’s start looking at these bottom payers, and let’s figure out how we can get a game plan and at least start chipping away little by little.’ If you’re not going to do anything drastic, which is often not the best case, going from a heavy PPO practice to a fee-for-service practice overnight is not necessarily the recommended action for most offices. But how can we at least look to see what’s working, what’s not, and get some kind of game plan to get some action?” (8:23—9:13)

“The difference between a direct contract and a shared network agreement . . . a direct contract means you sign directly with the insurance company. So, if you sign directly with Aetna or MetLife or Guardian, or whoever it is, the upside to that is that it’s going to be an easier way to participate. You sign directly with the insurance company. You know what you’re getting. It will put you in-network faster than if you go through a shared network agreement.” (14:32—15:00)

“There are some definite advantages to direct contracts. All things being equal, I prefer direct contracts. If we can get a good direct contract, that’s always our goal. But where the big dilemma has come in is all of these insurance companies now have made multiple shared network agreements with other companies. So, really, Delta is the only one left that has no shared network agreements with anybody. If you want to be in-network with Delta, you’ve got one choice. You sign directly with Delta, or you stay out-of-network. There are no other avenues to participate with Delta. Pretty much everybody else has at least some of their networks that can come in through shared network agreements with other companies.” (15:02—15:44)

“A shared network agreement is essentially that you’re in-network with that insurance company, but you’re using somebody else’s fee schedule. So, as these insurance companies have continued to make more and more of these agreements — I mean, there are a lot of them now that could have eight or ten different shared network agreements. So, one thing you have to be really careful about is understanding, of your contracts, who has shared network agreements with who. Otherwise, here’s what happens. I talked to somebody this week who said, ‘Yup, I already bit the bullet. I already sent in my termination for company A.’ I said, ‘Well, that’s great. But the problem is, as soon as you get out of that contract with company A, company A has seven other shared network agreements with companies that you’re in-network with. So, as soon as you drop that, you’re going to get picked back up again by somebody else. You’re going to be back in-network, and you’re going to get paid on somebody else’s fee schedule.’” (15:44—16:39)

“We can all guess how this works. If you drop a direct contract, because in most cases, not all, a direct contract is going to override everybody else. So, as long as you have that direct contract in place, they take priority. But as soon as you get out of that direct contract, that’s when the insurance company can attach to any other shared network agreement that you have in place. Now, the way this should’ve worked is it should’ve all been set up so that if there’s a shared network agreement, they have to ask your permission to be added. Well, we can all laugh about that now because we know that’s not the way it works. You can opt out of most of those agreements, but the burden is on you to opt out. You automatically get opted in, and you have to be the one to figure out how to opt out of those agreements.” (16:46—17:33)

“If you have a direct contract and you terminate it, you want that company to be picked back up again by the highest paying option. Or maybe you want to stay completely out-of-network. Well, the insurance company has no interest at all in paying you the highest option. If there are five contract options that they have to choose from, why do they want to attach to the highest option? They’re going to want to attach to the lowest option.” (17:36—18:00)

“If you start randomly dropping things thinking, ‘It’s finally time to get out of some of these bottom ones,’ where you can have a really unpleasant surprise is, all of a sudden, you’re back in-network, and now you’re getting paid worse than you were originally because there’s a lower paying shared network agreement that attached back on for you. So, if you’re not careful, you can actually go the wrong direction with some of this. That’s why, before you actually make any changes, you want to go, ‘If I get out of this, what, of my other contracts, could pick that company back up again? And do I want them to pick up, or not?’ And if not, then opt out of those agreements. Most of them, you can.” (18:01—18:43)

“When we say opt out, just to clarify, an opt-out is different than a termination. A termination means you’re terminating the whole contract. An opt-out means you’re keeping that contract in place, but you’re saying, like if you opt out of Aetna’s agreement with Ameritas, what you’re saying is, ‘Hey, Aetna. I want to keep my contract in place with you. I still want to be a contracted provider with Aetna, but I don’t want you to allow Ameritas to attach to your fees.’ So, those are two different pieces of this whole puzzle.” (18:43—19:15)

“You want to step back, map out everything ahead of time, and decide where you want to move things. Get all that paperwork in place proactively before you start randomly dropping things. Otherwise, it’s six months down the road, and you’re like, ‘I dropped all this stuff and I’m not making any more money. What happened?’ We don’t want that happening either.” (19:17—19:37)

“Every six months or so, pull a handful of EOBs and look to see, ‘Am I getting paid the way I’m supposed to be getting paid?’ Because what will happen is, a lot of times when these shared agreements are created, either you don’t get a notice, or you got a notice, but nobody caught it. Nobody realizes, ‘Does it mean anything to us?’ And so, pretty soon, they start automatically downgrading, and you don’t even know that it’s happening. So, you definitely want to be spot-checking EOBs on occasion and going, ‘Is this actually paying me the way I thought I was supposed to be paid, or has something happened here that we weren’t aware of? How do we jump in and rectify that?’” (20:17—21:00)

“In the market right now, if an insurance company negotiates, you’re probably looking at 3% to 5%. This is not going to be something that overwhelms you with crazy high increases. There are a couple of companies that have done pretty major decreases across the country in the past couple of years. So, keep an eye on that . . . You’ve really got to keep requesting every two or three years. They’re not going to do a request or look at it more than once every two years, sometimes once every three years now. So, honestly, don’t waste your time every year going back. But if it’s been two or three years, go back and ask. All they can say is no, so it’s certainly not going to hurt you to ask.” (22:13—23:07)

“We used to work with some amazing reps with the insurance companies. And we still do work with some amazing reps. But their ability to have the same kind of discretion to make big increases is not as much there as it used to be. This is kind of a different game now. It used to be if you had a really low fee schedule for your area, then the insurance company reps would go, ‘Yeah, this is pretty low. Let’s get you up into a more reasonable range.’ And we would see some that would be bigger increases. There’s not as much of that now. So, if they do anything, you’re going to see a little bit more of almost a cost-of-living kind of range. You’re not going to be looking at huge increases in a lot of areas.” (23:13—23:58)

“There’s always a case to be made, if you are in an underserved area where they need providers — a lot of this is timing. Sometimes, an insurance company last year did not negotiate. This year, they are. So, it’s still good to continue to keep that in a rotation with your practice where every couple years you’re checking back, because you just don’t know. In your area, things can change. There’s not necessarily a lot that you’re going to be able to do to make that increase bigger outside of, how badly do they need you? That’s the big thing.” (23:59—24:35)

“I remember having three little kids and being a couple years into a new practice. I remember a lot of sleepless nights, laying there, thinking, ‘Okay. We’ve got the supply bill due in three days. We’ve got payroll in five days.’ That’s a real thing. With the cost of dental school now compared to where it used to be, dental practice owners have to be more business-oriented than they did 20 or 30 years ago. There’s a lot more at play here. So, then you get that end trend where you go, ‘I don’t have to worry about that as much, and I have the ability to get out of some things that maybe I wouldn’t have done five years ago.’ So, the trends I see tend to be more geared toward where that dentist is at in their life as opposed to their practice.” (26:30—27:25)

“I do think COVID-19 was a gamechanger for dentists in some other ways where — I mean, nobody liked the whole, let’s be forced to shut down our offices outside of our control. Nobody likes feeling out of control. But there are a lot of dentists who came out of that and said, ‘I was able to reprioritize a few things in my personal life — by force, maybe, but I still did it. And now, I want my practice to look a little bit different.’ And so, I’m definitely seeing more dentists say, ‘My end plan that I thought was going to happen when I was 55, now I’m 48, and I’m doing it now instead.’” (27:29—28:08)

“If you’ve got a new patient calling and you can’t get them in, then that’s a problem. And if you’re saying, ‘Well, we can get you in, but my next opening is July 17th,’ well, that doesn’t do you any good. Because when you think about it, you’ve only got eight hours a day, or however many hours a day you see patients, to see patients. If you’re booking out six months instead of two weeks, what is that gaining you? You can only see one patient at a time. So, continuing to book farther and farther and farther out, that doesn’t get you anything other than a continual backlog of people who are waiting to get in.” (29:51—30:27)

“Where I think a lot of dentists can make a mistake is when you get that busy, your first thought is, ‘How do I hire more people to take care of the load of patients who are trying to get in?’ And not that that’s a bad idea. But what can happen is, you’re booking out, booking out, and you’re like, ‘I’ve got to get an associate.’ But before you do that, if you are able to see your numbers, and if you look and go, ‘You know what? We’ve got $300,000 of production a year, and we’re writing off over half of that amount,’ as soon as you hire an associate, now, not only are you, as the dentist, taking a 50% hit, you’re now paying somebody else out-of-pocket on top of the 50% hit that you’re taking. So, is there a case to be made to say, ‘We would be better off, instead of doing $1 million worth of production, doing $800,000 but we knock out $200,000 worth of PPOs where we’re collecting our full fee for that’?” (30:28—31:29)

“Most patients have out-of-network benefits. It’s not to say you’re going to keep all of your patients when you go out-of-network. But it’s also not to say you’re going to lose all of your patients when you go out-of-network. If you could lose 50% of your patients and still collect exactly what you’re collecting now, wouldn’t you rather do that than book out further and further or hire more staff? Which, let’s be honest, most dentists, one of the hardest things that they deal with is the staffing side of things. For most dentists continuing to expand, it still may be a good idea. I’m not anti that, but we have to admit it brings another set of headaches and another set of costs with it.” (31:30—32:09)

“Some people do amazingly well with PPO efficiency and lots of associates as well. But I do think that, sometimes, the first thought is, ‘How do we hire more people?’ when the first thought maybe should be, ‘Are we making what we should be making on the production we’re already doing before we go that route?’” (32:34—32:52)

“Where is your hardest spot to fill? Is it 1:00 in the afternoon? Maybe you have openings, but maybe the ones that are paying you less, you still have the same amount of openings for those patients, but maybe you use those to fill some spots that are a little bit harder to keep filled. And maybe those after-school times are ones that you, again, same number of spots, but maybe you are a little bit more strategic about how you place some of that.” (33:47—34:15)

“The tricky part about Delta is you can’t really give a blanket answer because it really depends on what state you’re in. And the thing you have to be very careful about is, in some states, you can still be Premier-only, where in some states you cannot. So, to give a brief rundown of how this works, because this is really confusing to a lot of offices, understandably, let’s say that you are participating with Delta PPO. You still have a Delta Premier contract, so technically you still have a Delta Premier fee schedule. It’s just that when you take both Premier and PPO with it, Delta is almost always going to downgrade you to the lowest PPO rate. So, in that case, you have a Premier fee schedule, but it’s essentially irrelevant because they’re never going to pay you on it.” (35:23—36:09)

“The big question is, in what cases can you not take the PPO and keep only that higher Premier fee schedule instead? In some states, you could still do that. Anybody can do it. You can say, ‘I want to be Premier-only. I don’t want to take PPO.’ But in other states, you cannot. But the thing you want to be careful about is — like California, you cannot. So, let’s pretend you’re a California doctor listening right now, and you remember that you signed your Delta contract back in 2010 when you first did a startup. Well, that was before they changed the rules in California. So, even though the rule is no longer that you can move to Premier-only, if your contract predates when that change was made, you have the old version of the contract and you still can drop PPO and move to Premier-only. So, if you have any questions about, ‘What’s my situation? Am I allowed to drop PPO and move to Premier-only?’ get it in writing. Get it in writing from Delta, can I drop the PPO portion of my contract?” (36:10—37:13)

“Let’s say you’re going to buy a practice in California. So, this is what you were talking about as far as, ‘Yeah, I bought something. But did I buy the same thing the previous owner has?’ And no, you are not. So, if you’re buying a practice in California — and California is probably the biggest state to watch out for this with, because in some states, the spread between the PPO and Premier fee schedule is very small. If you’re in Washington state, it’s about 4%, usually. So, in all honesty, Washington state, who cares whether you take PPO or Premier. If the difference is 4%, it’s not make-it-or-break-it anyway. It’s not going to make that much of a difference. In California, the differences are more like 30-plus percent. You might be talking about a $700 crown versus a $1,200 crown. It’s a huge difference between PPO and Premier fees. So, if you buy out a dentist who was Premier-only, then as soon as you buy, you automatically have to take PPO with it. And as soon as you take PPO with Premier, they’re going to pay you on the PPO rate.” (37:15—38:17)

“You can, of course, stay completely out-of-network with Delta. But just be careful. If you’re buying a practice, if you’re doing a startup — like, if you’re doing a startup and you are Premier-only at an associate position, but they’ve changed the rules since you added, you still have to check the rules for your new startup because there are going to be tax ID numbers, potentially different rules.” (38:18—38:37)

“Let’s say you’re a Delta PPO and you can move to Premier-only. The first thing that most people say is, ‘It doesn’t matter. I don’t have any Premier patients, so what good does it do me to move from PPO to Premier-only? I don’t have any Premier patients.’ And that’s absolutely right. You can probably count on your fingers the number of true Premier policyholders that you have in your practice. Meaning, they’re going to pay you on Premier rates no matter what. But that’s not what you’re looking for. What you’re looking for is, how would your PPO patients’ benefits work if they were to see a Premier-only dentist? So, if you are PPO and you pull ten of your largest employer groups, and let’s say they have the same percentage benefits with PPO or Premier. Well, if you drop the PPO part and you move to Premier-only, they’re going to pay you those percentages, but on the Premier rates rather than the PPO rates.” (38:44—39:37)

“Don’t automatically dismiss going from PPO to Premier-only if you have the option, because making that transition may not be as much of a deal as you’re thinking it might be. Your PPO patients may still have very good benefits if they were to see a Premier-only dentist.” (39:39—39:57)

“It’s been a rough couple of years, and this industry has gotten a little crazy with all these agreements. So, it’s easy to feel like you’re the only person who’s lost with this insurance stuff. And I’m telling you, this is all we do [at Unlock the PPO], all day long. This is it. We don’t do billing, coding — we do nothing else with insurance but this, and we have a hard time keeping up with all the changes that are going on. So, this is not something anybody should think they’re missing out on if they don’t know all the ins and outs. It’s something the insurance companies have made convoluted, not the dentist.” (41:08—41:39)


0:00 Introduction.

1:51 Sandi’s background.

5:49 Trends in fee-for-service, explained.

9:44 The average practice write-off percentage.

11:14 Failure rates with practices that go fee-for-service.

14:09 Shared agreements, explained.

20:03 Regularly audit EOBs.

21:01 The state of negotiations.

24:35 Trends correlate with the dentist’s life.

29:16 What to know about scheduling out.

32:55 Strategically schedule less-desirable patients.

34:18 The Premier question.

40:07 Last thoughts.

41:47 How Sandi can help your practice.

Sandi Hudson Bio:

Sandi Hudson, founder of Unlock the PPO, has a degree in Business Administration from the University of Iowa. After several years in healthcare and fundraising management, she transitioned into dental office management and spent a decade overseeing dental insurance participation and negotiations. Her experience comes from hands-on experience rather than concepts that just sound good on paper. She has worked with offices across the country and has a broad perspective on how to tailor insurance decisions to various regions and demographics. Her goal is to help dentists take a common-sense approach to managing insurance participation in a way that best fits their goals. By keeping abreast of industry trends, she is well-positioned to help dentists prepare for how insurance will best fit into their practices, both now and in the future. Sandi focuses on the analysis side of the business by crunching numbers and making recommendations about participation levels. Sandi is married to a dentist and has a unique perspective of both consultant and dental practice owner, uncommon to the industry.


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